The Minimum Wage Hike Means Different Things for Small Business

The new year saw 13 states increasing their minimum wage levels and more changes are expected as President Obama supports a federal raise to $10.10 per hour. In the midst of these changes, four small business owners talked to CNN, presenting very different perspectives on the increases and how they affect their businesses.

Improved Community Health

Golden Chiropractic and Wellness Center of Bradenton, Florida, provides primary and chiropractic care to a lower income community, with most patients earning minimum wage. At least half of her patients are unable to pay for their visits, according to Dr. Fay Golden.

“A minimum wage increase would mean that those patients who I currently see for free would be able to contribute in some way to the cost of their care,” says Dr. Golden, who is sometimes paid in “fresh fruit” or “a pot of soup.” What will a minimum rate hike mean for her? More patients would be able to pay for their medical care and more new patients would likely come in, she says. What’s more, people would be able to afford healthier food. “While that may not make me money, an overall healthier community is good for the economy,” she points out.

Dr. Golden says the proposed federal hike would not change her costs as she pays more than the recommended minimum wage to her one employee.

High School-Age Workers Would be the First to Be Released

Patricia Orzano, who owns a Long-Island 7-Eleven, says her high school workers will be the first to go following the New York State minimum wage increase to $8.00 from $7.25 on January 1st. The increase is expected to reach $9.00 by 2016; higher should a proposal to raise the rate to $10.10 pass.

“What really scares me is the federal raise. It’s so totally unaffordable,” says Orzano. “It will require me to cut hours across the board or cut part-timers.” Orzano also says she will not hire untrained staff if she has to pay $9 per hour, as that is what she pays her more experienced, full-time staff today.

Small Business Tied to Fixed Pricing Are Unable to Absorb Increased Rate

Vince Gildner, director of a physical therapy center in the state of Washington, is unable to increase his prices to absorb another minimum wage increase. In his state, the minimum wage is $9.32, the highest state-set rate in the country; Governor Jay Inslee is seeking another hike.

Gildner, a preferred healthcare provider, operates under insurer contracts in which the insurer sets the price. “My reimbursement is a fixed rate, and I can’t do anything to change that,” Gildner says. He fears he may be forced to cut his 20-person payroll or find other ways to cut expenses.

Increased Minimum Wage is Better for the Economy, All Businesses

ProPose CEO, Anne Staines, pays her five employees more than the state minimum of $8 an hour at her California-based marketing firm. She says she does not want her staff worried about having to work two jobs or being unable to support their families. “I’m confident that if they’re happy in these jobs and successful, I’ll be successful,” Staines explains.

Not every business owner is singularly focused on profits, she says. As for Staines, it is her staff’s happiness and well being that is her priority. Besides, she says, the federal minimum wage increase will benefit the economy. “The growing disparity of incomes only hurts our economy and commerce,” she notes.